Russia mining

With bountiful and diverse minerals, Russia, the world’s largest country in land area, occupying 75% of the former Soviet Union, had a significant percentage of the world’s mineral resources and produced 14% of the world’s total mineral extraction. Mining was the country’s leading industry in 2002, and Russia was the largest producer of palladium and nickel (20% of world output), and ranked second in the production of aluminum and platinum-group metals (PGMs), third in potash, sixth in gold, and seventh in mine copper. Russia also produced a large percentage of the CIS’s bauxite, coal, cobalt, diamond, lead, mica, natural gas, oil, tin, zinc, and many other metals, industrial minerals, and mineral fuels. Enterprises considered part of the mineral and raw-material complex contributed 70% of the budget revenues derived from exports; petroleum, petroleum products, and natural gas were Russia’s leading export commodities in 2002; metals and chemicals also were leading export commodities.

More than half of Russia’s mineral resources were east of the Urals. The most significant regions for mining were Siberia, particularly East Siberia, for cobalt, columbium (niobium), copper (70% of Russia’s reserves), gold, iron ore, lead (76% of the country’s reserves), molybdenum, nickel (becoming depleted), PGMs, tin, tungsten, zinc, asbestos, diamond, fluorspar, mica, and talc; the Kola Peninsula, for cobalt, columbium, copper, nickel, rare-earth metals, phosphate (the majority, in the form of apatite), and tantalum; North Caucasus (copper, lead, molybdenum, tungsten, and zinc); the Russian Far East (gold, lead, silver, tin, tungsten, and zinc); the Urals, with bauxite, beryllium, cobalt, copper, iron ore, lead, magnesite, nickel, titanium, vanadium, zinc, asbestos, bismuth, potash (96% of the country’s reserves), soda ash, talc, and vermiculite; and the region near the Arctic Circle (cobalt, gold, mercury, nickel, tin, phosphate, and uranium). The Kaliningrad region contained 95% of the world’s amber deposits, and Russia possessed 10% of the world’s copper reserves. Metallurgical enterprises in Kola, North Caucasus, and the Urals were operating on rapidly depleting resource bases, and were experiencing raw material shortages.

A large percentage of Russian reserves was in remote northern and eastern regions that lacked transport, were distant from major population and industrial centers, and experienced severe climates, and enterprises built there in the Soviet era had curtailed operations sharply. Efforts to develop new large deposits of nonferrous metals near the eastern Baikal-Amur railroad were not progressing. One researcher proposed the creation of small mining enterprises to develop the rich small deposits of eastern Russia. Reserves of iron ore were sufficient to last 15-20 years; those of nonferrous metals, 10-30 years. Reserves of major minerals included potash, 1.8 billion tons; magnesite, 585 million tons; bauxite, 250 million tons; phosphate rock, 240 million tons; asbestos, 100 million tons; fluorspar, 60 million tons; manganese, 15 million tons; nickel, 6.3 million tons; vanadium, 5 million tons; zinc, 4 million tons; antimony, 3 million tons; and lead, 3 million tons.

Output of iron ore was 86.63 million tons in 2000, 81.31 million tons in 1999, and 72.34 million tons in 1998; increased demand from the domestic metallurgical sector spurred the rise. Iron ore output was at 77% of the 1990 level (better than other metals), and product quality has been maintained. The largest producer was Kursk Magnetic Anomaly, at Zheleznogorsk and Gubkin, with a 50 million ton per year capacity.

Output of copper was 570,000 tons in 2000, 530,000 in 1999, and 500,000 in 1998. The Noril’sk complex, in East Siberia, produced 70% of the country’s copper, and planned to increase output of cuprous ore from its Oktyabr’skiy underground mine, from 100,000 tons per year to 1.6 million tons, because the cuprous ores were 40% higher in copper content than the nickel-rich ores; the Oktyabr’skiy mine supplied 70% of Noril’sk’s copper output, and was planning to decrease production of the nickel-rich ores.

PGM production included 94,000 tons of palladium (85,000 in 1999, and 80,000 in 1998), and 30,000 tons of platinum (25,000 in 1998). Sixty percent of PGM output came from the Oktyabr’skiy mine, Noril’sk, and a plan to expand output at the mine of cuprous ores by a factor of sixteen was projected to yield more PGMs, as would two new nickel-rich mines, the Glubokiy and the Skalisty, that had a high PGM content; the Skalisty planned to reach a 2 million ton per year capacity by 2002.

The output of other metals in 2000 was: bauxite, 4.2 million tons (3.75 million tons in 1999, and 3.3 million tons in 1996); nickel, 270,000 tons (230,000 in 1996 – 40% less than the peak levels of the late 1980s; 96% came from the Kola Peninsula and East Siberia, and 197,300 tons were exported to non-CIS countries); zinc, 136,000 tons (86.7%, from the Urals); lead, 13,300 tons (23,000 in 1996; 62.8% came from the Russian Far East, and the Dalpolymetal mining and benefication complex, in Maritime territory, had a 20,000 ton per year capacity); magnesite, 1 million tons (from the Satka deposit, in Chelyabinskaya Oblast’, which had a 3.8 million tons per year capacity); tin, 5,000 tons (7,500 in 1997); titanium sponge, from the Perm region in the Urals, 30,000 tons (24,000 in 1999); molybdenum, 2,400 tons (2,000 in 1998); and cobalt, 3,600 tons. Gold mine output – from Yakut-Sakha, Buryat, Magadan, Krasnoyarsk, Maritime, and Tuva – was 143,000 kg (metal content), up from 125,870 in 1999. Russia also produced the metal minerals alumina, nepheline concentrate, antimony, white arsenic, bismuth, chromium, manganese, mercury, silver, tungsten, and baddeleyite zirconium. Russia, which had the capacity to mine vanadium, stopped mining beryllium in the mid-1990s, and continued producing cobbed beryl.

Industrial mineral production in 2000 included phosphate rock (apatite concentrate and sedimentary rock), 4.45 million tons (4.04 million tons in 1998, and 3.2 million tons in 1996; 90%, from the Kola Peninsula, where total capacity was 20.7 million tons per year); marketable potash, 3.7 million tons (all from the Verkhne Kamsk deposit, in the Urals, with a capacity of 6.3 million tons per year); mica, 100,000 tons; fluorspar concentrate, 187,600 tons (153,800 in 1999, and 6,200 in 1997); and gem and industrial diamonds, 11.6 million carats each (10.5 million each in 1996; 99.8% was mined from kimberlite deposits near Mirnyy, in the Sakha [Yakutiya] Republic, at a value of $1.623 billion). Russia also produced the industrial minerals amber, asbestos, barite, boron, hydraulic cement, kaolin clay, feldspar, graphite, gypsum, iodine, lime, lithium minerals, nitrogen, salt, sodium compounds, sulfur (including native and pyrites), sulfuric acid, talc, and vermiculite. Russia’s only producer of amber, Kaliningrad Amber Works, was the world’s largest producer, yielding 441.8 tons in 2000, 364.5 in 1999, and 512.2 in 1998.

Despite decreased metal output compared with the Soviet period (e.g., 20% as much tin), Russia was producing more aluminum, lead, and zinc in 2000 than during the Soviet era. Ten percent of the technology employed in the nonferrous mining and metallurgy sector was rated as world class, labor productivity was one-third below that of advanced industrialized countries, and energy expenditures were 20%-30% higher. Another problem was that the resource base for metallurgical enterprises was not competitive in terms of quality, with the exception of antimony, copper, nickel, and molybdenum. More than one-half of industrial mineral output was exported, depriving the domestic sector of needed supplies, especially barite, bentonite, crystalline graphite, and kaolin. Russia has not been successful in attracting foreign investment for developing its mineral deposits, because of high and unpredictable taxes, an unreliable legal system, insecure licensing, inequity in the treatment of domestic and foreign partners, a weak banking system, and the inability to directly export commodities.

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